Misrepresentation and Fraud in Hawaii

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Posted: August 9, 2011

If a person or entity has been deceived, Hawaii law provides for a means of redress. Under Hawaii’s doctrine of fraudulent inducement, if a person enters into a contract due to the misrepresentations of the other contracting party, the person lied to may ask the court to invalidate the terms of the contract. The Hawaii Supreme Court recognizes the elements of fraudulent inducement to be as follows:

To constitute fraudulent inducement sufficient to invalidate the terms of the contract, there must be (1) a representation of material fact, (2) made for the purpose of inducing the other party to act, (3) known to be false but reasonably believed true by the other party, and (4) upon which the other party relies and acts to [his or her] damage.

However, not every representation will be actionable. The Intermediate Court of Appeals has held that only the following representations are actionable:

The false representation, to be actionable, must relate to a past or existing material fact, and not to the happening of future events[.] Generally, fraud cannot be predicated upon statements [that] are promissory in their nature at the time they are made and [that] relate to future actions or conduct. A promise relating to future action or conduct will be actionable, however, if the promise without the present intent to fulfill the promise[.]

Additionally, the party seeking to have the contract invalidated must prove that his or her reliance on the false representation was a reasonable one. Exotics Hawaii-Kona, Inc. v. E.I. Du Pont De Nemours & Co., 116 Hawai’i 277, 172 P.3d 1021 (2007). Finally, in addition to the above mentioned elements, the party seeking to invalidate the contract will have to prove that he or she suffered some sort of injury or damage as a result of the other party’s misrepresentations. Matsuura, 102 Hawaii at 163, 73 P.3d at 701.

Moreover, the Hawaii Unfair and Deceptive Trade Practices Act (H.R.S. § 480-2) provides a remedy to consumers and investors injured through marketing materials that had a “capacity to mislead.” A Plaintiff prevailing in a claim under H.R.S. § 480-2 may be awarded treble damages, attorneys fees and costs (H.R.S. § 480-13).

If you have been injured based on someone's negligent activity, you deserve to speak with a qualified Honolulu lawyer during a complimentary case evaluation today. This is the only way to know for certain whether or not you have a valid case. Please do not assume the content on this website as formal legal advice. It is for informational purposes only and any legal association you make with The Law Offices of Philip R. Brown based on the understanding of this information is strictly invalid. Serving Honolulu, Maui, and surrounding areas in Hawaii.